Consolidating Financial Information (Tables)

3 Months Ended

Mar. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidating Balance Sheet

The following tables present OneBeacon's consolidating balance sheets as of March 31, 2014 and December 31, 2013 and statements of operations and comprehensive income and cash flows for the three months ended March 31, 2014 and 2013. These financial statements reflect the Company's ("guarantor") financial position, results of operations and cash flows on a stand-alone basis, that of OBH ("the issuer") and of the Company's other entities ("non-guarantor subsidiaries") as well as the necessary consolidating adjustments to eliminate intercompany balances and transactions.

Consolidating Balance Sheet	The Company (guarantor)			Non-guarantor subsidiaries		OBH (issuer)			Consolidating adjustments			Consolidated
as of March 31, 2014				(in millions)
Assets
Investment Securities:
Fixed maturity investments, at fair value	$	—		$	1,765.7	$	2.9		$	(25.0	)	$	1,743.6
Short-term investments, at amortized cost (which approximates fair value)	2.0			143.3		7.4			—			152.7
Common equity securities, at fair value	—			347.1		—			—			347.1
Convertible fixed maturity investments, at fair value	—			29.3		—			—			29.3
Other investments	—			143.0		—			—			143.0
Total investment securities	2.0			2,428.4		10.3			(25.0		)	2,415.7
Cash	—			138.6		—			—			138.6
Reinsurance recoverables	—			83.1		—			—			83.1
Premiums receivable	—			249.2		—			—			249.2
Deferred acquisition costs	—			105.9		—			—			105.9
Net deferred tax asset	—			82.1		(2.4		)	0.1			79.8
Investment income accrued	—			9.6		—			(0.5		)	9.1
Accounts receivable on unsettled investment sales	—			6.7		—			—			6.7
Investments in subsidiaries	1,130.5			—		1,071.0			(2,201.5		)	—
Other assets	(2.3		)	289.5		2.7			—			289.9
Assets held for sale	—			1,803.1		—			—			1,803.1
Total assets	$	1,130.2		$	5,196.2	$	1,081.6		$	(2,226.9	)	$	5,181.1
Liabilities
Unpaid loss and loss adjustment expense reserves	$	—		$	1,069.8	$	—		$	—		$	1,069.8
Unearned premiums	—			582.2		—			—			582.2
Debt	—			—		299.7			(25.0		)	274.7
Accounts payable on unsettled investment purchases	—			25.6		—			—			25.6
Other liabilities	(0.1		)	285.9		7.3			(0.5		)	292.6
Liabilities held for sale	—			1,803.1		—			—			1,803.1
Total liabilities	(0.1		)	3,766.6		307.0			(25.5		)	4,048.0
OneBeacon's common shareholders' equity and noncontrolling interests
Total OneBeacon's common shareholders' equity	1,130.3			1,426.8		774.6			(2,201.4		)	1,130.3
Total noncontrolling interests	—			2.8		—			—			2.8
Total OneBeacon's common shareholders' equity and noncontrolling interests	1,130.3			1,429.6		774.6			(2,201.4		)	1,133.1
Total liabilities, OneBeacon's common shareholders' equity and noncontrolling interests	$	1,130.2		$	5,196.2	$	1,081.6		$	(2,226.9	)	$	5,181.1

Consolidating Balance Sheet	The Company (guarantor)			Non-guarantor subsidiaries		OBH (issuer)			Consolidating adjustments			Consolidated
as of December 31, 2013				(in millions)
Assets
Investment Securities:
Fixed maturity investments, at fair value	$	—		$	1,725.4	$	—		$	(24.5	)	$	1,700.9
Short-term investments, at amortized cost (which approximates fair value)	13.0			140.0		4.0			—			157.0
Common equity securities, at fair value	—			336.9		—			—			336.9
Convertible fixed maturity investments, at fair value	—			30.5		—			—			30.5
Other investments	—			139.6		—			—			139.6
Total investment securities	13.0			2,372.4		4.0			(24.5		)	2,364.9
Cash	—			166.6		1.5			—			168.1
Reinsurance recoverables	—			89.9		—			—			89.9
Premiums receivable	—			228.2		—			—			228.2
Deferred acquisition costs	—			103.7		—			—			103.7
Net deferred tax asset	—			93.1		(2.4		)	(0.1		)	90.6
Investment income accrued	—			10.3		—			(0.2		)	10.1
Accounts receivable on unsettled investment sales	—			3.3		—			—			3.3
Investments in subsidiaries	1,092.0			—		1,034.9			(2,126.9		)	—
Other assets	(0.8		)	272.4		1.1			—			272.7
Assets held for sale	—			1,880.1		—			—			1,880.1
Total assets	$	1,104.2		$	5,220.0	$	1,039.1		$	(2,151.7	)	$	5,211.6
Liabilities
Unpaid loss and loss adjustment expense reserves	$	—		$	1,054.3	$	—		$	—		$	1,054.3
Unearned premiums	—			544.9		—			—			544.9
Debt	—			—		299.7			(25.0		)	274.7
Accounts payable on unsettled investment purchases	—			11.6		—			—			11.6
Other liabilities	(0.1		)	335.0		3.9			(0.2		)	338.6
Liabilities held for sale	—			1,880.1		—			—			1,880.1
Total liabilities	(0.1		)	3,825.9		303.6			(25.2		)	4,104.2
OneBeacon's common shareholders' equity and noncontrolling interests
Total OneBeacon's common shareholders' equity	1,104.3			1,391.0		735.5			(2,126.5		)	1,104.3
Total noncontrolling interests	—			3.1		—			—			3.1
Total OneBeacon's common shareholders' equity and noncontrolling interests	1,104.3			1,394.1		735.5			(2,126.5		)	1,107.4
Total liabilities, OneBeacon's common shareholders' equity and noncontrolling interests	$	1,104.2		$	5,220.0	$	1,039.1		$	(2,151.7	)	$	5,211.6

Consolidating Statement of Operations and Comprehensive (Loss) Income

Consolidating Statement of Operations and Comprehensive Income	The Company (guarantor)			Non-guarantor subsidiaries			OBH (issuer)			Consolidating adjustments			Consolidated
Three months ended March 31, 2014	(in millions)
Revenues
Earned premiums	$	—		$	276.5		$	—		$	—		$	276.5
Net investment income	—			10.3			—			(0.3		)	10.0
Net realized and change in unrealized investment gains	—			19.4			—			(0.5		)	18.9
Net other revenues	—			1.0			—			—			1.0
Total revenues	—			307.2			—			(0.8		)	306.4
Expenses
Loss and loss adjustment expenses	—			149.4			—			—			149.4
Policy acquisition expenses	—			46.7			—			—			46.7
Other underwriting expenses	—			49.4			—			—			49.4
General and administrative expenses	1.6			1.6			0.1			—			3.3
Interest expense	—			—			3.5			(0.3		)	3.2
Total expenses	1.6			247.1			3.6			(0.3		)	252.0
Pre-tax (loss) income from continuing operations	(1.6		)	60.1			(3.6		)	(0.5		)	54.4
Income tax (expense) benefit	—			(8.3		)	1.6			0.2			(6.5		)
Net (loss) income from continuing operations	(1.6		)	51.8			(2.0		)	(0.3		)	47.9
Loss from discontinued operations, net of tax	—			(0.5		)	—			—			(0.5		)
(Loss) income before equity in earnings of unconsolidated affiliates	(1.6		)	51.3			(2.0		)	(0.3		)	47.4
Equity in earnings of subsidiaries, net of tax	48.6			—			41.1			(89.7		)	—
Net income including noncontrolling interests	47.0			51.3			39.1			(90.0		)	47.4
Less: Net income attributable to noncontrolling interests	—			(0.4		)	—			—			(0.4		)
Net income attributable to OneBeacon's common shareholders	47.0			50.9			39.1			(90.0		)	47.0
Other comprehensive income, net of tax	—			—			—			—			—
Comprehensive income attributable to OneBeacon's common shareholders	$	47.0		$	50.9		$	39.1		$	(90.0	)	$	47.0

Consolidating Statement of Operations and Comprehensive Income	The Company (guarantor)			Non-guarantor subsidiaries			OBH (issuer)			Consolidating adjustments			Consolidated
Three months ended March 31, 2013	(in millions)
Revenues
Earned premiums	$	—		$	286.5		$	—		$	—		$	286.5
Net investment income	—			10.3			(0.6		)	(0.3		)	9.4
Net realized and change in unrealized investment gains	—			28.7			0.1			(0.4		)	28.4
Net other revenues	—			24.0			—			—			24.0
Total revenues	—			349.5			(0.5		)	(0.7		)	348.3
Expenses
Loss and loss adjustment expenses	—			148.9			—			—			148.9
Policy acquisition expenses	—			54.8			—			—			54.8
Other underwriting expenses	—			49.3			—			—			49.3
General and administrative expenses	1.0			3.2			(0.2		)	—			4.0
Interest expense	—			—			3.5			(0.3		)	3.2
Total expenses	1.0			256.2			3.3			(0.3		)	260.2
Pre-tax (loss) income from continuing operations	(1.0		)	93.3			(3.8		)	(0.4		)	88.1
Income tax (expense) benefit	0.1			(22.9		)	2.8			0.2			(19.8		)
Net (loss) income from continuing operations	(0.9		)	70.4			(1.0		)	(0.2		)	68.3
Income from discontinued operations, net of tax	—			0.5			—			—			0.5
Net (loss) income before equity in earnings of unconsolidated affiliates	(0.9		)	70.9			(1.0		)	(0.2		)	68.8
Equity in earnings of subsidiaries, net of tax	69.3			—			58.5			(127.8		)	—
Net income including noncontrolling interests	68.4			70.9			57.5			(128.0		)	68.8
Less: Net income attributable to noncontrolling interests	—			(0.4		)	—			—			(0.4		)
Net income attributable to OneBeacon's common shareholders	68.4			70.5			57.5			(128.0		)	68.4
Other comprehensive income, net of tax	0.1			—			0.1			(0.1		)	0.1
Comprehensive income attributable to OneBeacon's common shareholders	$	68.5		$	70.5		$	57.6		$	(128.1	)	$	68.5

Consolidating Statement of Cash Flows

Consolidating Statement of Cash Flows	The Company (guarantor)			Non-guarantor subsidiaries			OBH (issuer)			Consolidating adjustments			Consolidated
Three months ended March 31, 2014	($ in millions)
Cash flows from operations:
Net income including noncontrolling interests	$	47.0		$	51.3		$	39.1		$	(90.0	)	$	47.4
Charges (credits) to reconcile net income to cash flows provided from (used for) operations:
Undistributed earnings from subsidiaries	(48.6		)	—			(41.1		)	89.7			—
Net loss from discontinued operations	—			0.5			—			—			0.5
Net realized and change in unrealized investment gains	—			(19.4		)	—			0.5			(18.9		)
Deferred income tax expense	—			11.1			—			(0.2		)	10.9
Dividends received from subsidiaries	10.0			—			5.0			(15.0		)	—
Other operating items:
Net change in loss and LAE reserves	—			15.5			—			—			15.5
Net change in unearned premiums	—			37.3			—			—			37.3
Net change in premiums receivable	—			(21.0		)	—			—			(21.0		)
Net change in reinsurance recoverable on paid and unpaid losses	—			6.8			—			—			6.8
Net change in other assets and liabilities	2.4			(63.7		)	1.8			—			(59.5		)
Net cash provided from operations—continuing operations	10.8			18.4			4.8			(15.0		)	19.0
Net cash used for operations—discontinued operations	—			(14.6		)	—			—			(14.6		)
Net cash provided from operations	10.8			3.8			4.8			(15.0		)	4.4
Cash flows from investing activities:
Net maturities, purchases and sales of short-term investments	11.0			(3.3		)	(3.4		)	—			4.3
Maturities of fixed maturity investments	—			115.7			—			—			115.7
Sales of fixed maturity investments	—			324.5			0.1			—			324.6
Sales of common equity securities	—			24.3			—			—			24.3
Sales of convertible fixed maturity investments	—			9.8			(3.0		)	—			6.8
Return of capital and distributions of other investments	—			1.6			—			—			1.6
Purchases of fixed maturity investments	—			(466.0		)	—			—			(466.0		)
Purchases of common equity securities	—			(26.0		)	—			—			(26.0		)
Purchases of convertible fixed maturity investments	—			(3.8		)	—			—			(3.8		)
Contributions for other investments	—			(2.3		)	—			—			(2.3		)
Net change in unsettled investment purchases and sales	—			10.6			—			—			10.6
Net acquisitions of property and equipment	—			(0.6		)	—			—			(0.6		)
Net cash provided from (used for) investing activities—continuing operations	11.0			(15.5		)	(6.3		)	—			(10.8		)
Net cash provided from investing activities—discontinued operations	—			—			—			—			—
Net cash provided from (used for) investing activities	11.0			(15.5		)	(6.3		)	—			(10.8		)
Cash flows from financing activities:
Cash dividends paid to common shareholders	(20.0		)	—			—			—			(20.0		)
Cash dividends paid to parent	—			(15.0		)	—			15.0			—
Repurchases and retirements of common stock	(1.8		)	—			—			—			(1.8		)
Payments on capital lease obligation	—			(1.3		)	—			—			(1.3		)
Net cash used for financing activities—continuing operations	(21.8		)	(16.3		)	—			15.0			(23.1		)
Net cash used for financing activities—discontinued operations	—			—			—			—			—
Net cash used for financing activities	(21.8		)	(16.3		)	—			15.0			(23.1		)
Net decrease in cash during period	—			(28.0		)	(1.5		)	—			(29.5		)
Cash balance at beginning of period	—			166.6			1.5			—			168.1
Cash balance at end of period	$	—		$	138.6		$	—		$	—		$	138.6

Consolidating Statement of Cash Flows	The Company (guarantor)			Non-guarantor subsidiaries			OBH (issuer)			Consolidating adjustments			Consolidated
Three months ended March 31, 2013	($ in millions)
Cash flows from operations:
Net income including noncontrolling interests	$	68.4		$	70.9		$	57.5		$	(128.0	)	$	68.8
Charges (credits) to reconcile net income to cash flows provided from (used for) operations:
Undistributed earnings from subsidiaries	(69.3		)	—			(58.5		)	127.8			—
Net income from discontinued operations	—			(0.5		)	—			—			(0.5		)
Net realized and change in unrealized investment gains	—			(28.7		)	(0.1		)	0.4			(28.4		)
Net realized gain on sale of business	—			(23.0		)	—			—			(23.0		)
Deferred income tax expense	—			22.4			0.2			(0.2		)	22.4
Dividends received from subsidiaries	22.0			—			23.0			(45.0		)	—
Other operating items:
Net change in loss and LAE reserves	—			10.3			—			—			10.3
Net change in unearned premiums	—			(22.8		)	—			—			(22.8		)
Net change in premiums receivable	—			(1.8		)	—			—			(1.8		)
Net change in reinsurance recoverable on paid and unpaid losses	—			2.4			—			—			2.4
Net change in other assets and liabilities	1.1			(17.1		)	5.0			—			(11.0		)
Net cash provided from operations—continuing operations	22.2			12.1			27.1			(45.0		)	16.4
Net cash used for operations—discontinued operations	—			(40.7		)	—			—			(40.7		)
Net cash provided from (used for) operations	22.2			(28.6		)	27.1			(45.0		)	(24.3		)
Cash flows from investing activities:
Net maturities, purchases and sales of short-term investments	(2.2		)	(17.8		)	34.8			—			14.8
Maturities of fixed maturity investments	—			103.1			0.6			—			103.7
Sales of fixed maturity investments	—			567.0			101.4			(35.7		)	632.7
Sales of common equity securities	—			89.7			—			—			89.7
Sales of convertible fixed maturity investments	—			29.6			—			—			29.6
Return of capital and distributions of other investments	—			18.6			—			—			18.6
Purchases of fixed maturity investments	—			(576.1		)	(133.8		)	35.7			(674.2		)
Purchases of common equity securities	—			(102.3		)	—			—			(102.3		)
Purchases of convertible fixed maturity investments	—			(5.0		)	—			—			(5.0		)
Contributions for other investments	—			(16.0		)	—			—			(16.0		)
Proceeds from sale of business	—			31.3			—			—			31.3
Net change in unsettled investment purchases and sales	—			(18.3		)	—			—			(18.3		)
Net acquisitions of property and equipment	—			(3.0		)	—			—			(3.0		)
Return of capital to OneBeacon U.S. Enterprises Holdings, Inc.	—			30.0			—			(30.0		)	—
Net cash (used for) provided from investing activities—continuing operations	(2.2		)	130.8			3.0			(30.0		)	101.6
Net cash provided from investing activities—discontinued operations	—			—			—			—			—
Net cash (used for) provided from investing activities	(2.2		)	130.8			3.0			(30.0		)	101.6
Cash flows from financing activities:
Cash dividends paid to common shareholders	(20.0		)	—			—			—			(20.0		)
Cash dividends paid to parent	—			(45.0		)	—			45.0			—
Return of capital to OneBeacon U.S. Enterprises Holdings, Inc.	—			—			(30.0		)	30.0			—
Payments on capital lease obligation	—			(1.8		)	—			—			(1.8		)
Net cash used for financing activities—continuing operations	(20.0		)	(46.8		)	(30.0		)	75.0			(21.8		)
Net cash used for financing activities—discontinued operations	—			—			—			—			—
Net cash used for financing activities	(20.0		)	(46.8		)	(30.0		)	75.0			(21.8		)
Net increase in cash during period	—			55.4			0.1			—			55.5
Cash balance at beginning of period	—			43.9			—			—			43.9
Cash balance at end of period	$	—		$	99.3		$	0.1		$	—		$	99.4